Questions and Answers
What are the 4 elements of fraud?
- Matter false statement, 2. Know statement is false, 3. Rely on false statement, 4. Financial loss
What is the distinct difference between a fraud and an attempted fraud?
Loss of money
________ _____________ is the process of making illegally obtained proceeds appear legal.
Money Laundering
What two financial statements are usually provided by a business to a financial institution when trying to secure a business loan?
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________ _________ is a financial statement that summarizes a company's assets, liabilities plus the net worth at a specific point in time.
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Is a financial statement that reports a company's revenue and expenses and profit/loss over a specific period of time?
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What is a division of the United States Treasury Department whose goal is to prevent and punish money laundering?
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What is a report that U.S. financial institutions are required to file for each deposit, withdrawal or exchange of currency in excess of $10,000?
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What is a report that financial institutions must file following a suspected incident of money laundering?
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What is the form that needs to be filed by any person who receives more than $10,000 in cash in a single transaction?
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What is the central bank of the United States, founded in 1913?
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Who was the New York City hedge fund manager arrested in 2008 for operating the largest Ponzi scheme?
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Name the world's largest anti-fraud organization.
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Name the largest international organization dedicated to enhancing AML/CTF knowledge.
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What are the 4 primary financial institution regulators?
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What are the 2 primary regulators for Wall Street?
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Name the 4 largest banks in the United States.
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Name the three lawful ways in which law enforcement may obtain financial records.
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Who is Joey Coyle?
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What is a fraud pyramid?
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Name 7 countries that are not allowed in the U.S.
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What are the components of structuring money?
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What does the term red flags refer to in financial transactions?
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What is the Bank Secrecy Act?
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What is structuring?
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Who is Joey Coyle?
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A ______ _________ ________ (____) is a legal term used to describe businesses that transmit or convert money.
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The _______ _________ ____ (___) was created in 1970 to assist in criminal, tax and regulatory investigations.
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What is accounting?
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What is OFAC?
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What is a specially designated national?
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Name 10 countries that are not part of the 10.
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Who is Paul Manafort?
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What is a beneficial owner?
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What does PEP stand for?
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Study Notes
Fraud Elements
- Four elements of fraud: false statement regarding a matter, knowing the statement is false, reliance on that statement, and financial loss incurred.
Fraud vs. Attempted Fraud
- The primary distinction lies in the actual monetary loss; fraud involves loss, while attempted fraud does not lead to financial loss.
Money Laundering
- The process of making illegally obtained proceeds appear legal.
Financial Statements for Loans
- Businesses typically provide two key financial statements to secure a loan: balance sheet and income statement.
Balance Sheet
- A financial statement summarizing a company's assets, liabilities, and net worth at a specific point in time.
Income Statement
- A financial document reporting a company's revenue, expenses, and profit/loss over a specific timeframe.
Financial Crime Enforcement Network (FinCEN)
- A division of the United States Treasury Department, aiming to prevent and punish money laundering and associated crimes.
Currency Transaction Report (CTR)
- Required for any deposit, withdrawal, or exchange of currency exceeding $10,000 by U.S. financial institutions.
Suspicious Activity Report (SAR)
- Filed by financial institutions when there is suspicion of money laundering, fraud, or other legal violations.
Form 8300
- Must be filed by individuals in trade or business who receive more than $10,000 in cash in a single transaction.
Federal Reserve
- Central bank of the United States established in 1913, providing a stable monetary and financial system.
Bernie Madoff
- New York City hedge fund manager arrested in 2008; sentenced to 150 years for operating the largest Ponzi scheme in history.
Association of Certified Fraud Examiners (ACFE)
- The largest anti-fraud organization providing training and education in fraud detection and prevention.
Association of Certified Anti-Money Laundering Specialists (ACAMS)
- Largest international membership organization focused on enhancing knowledge in anti-money laundering and financial crime prevention.
Primary Financial Institution Regulators
- Federal Reserve Board, FDIC (Federal Deposit Insurance Corporation), National Credit Union Administration, Office of the Comptroller of the Currency (OCC).
Wall Street Regulators
- The two primary regulators are the United States Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Largest U.S. Banks
- Notable banks include JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup.
Evidence Acquisition by Law Enforcement
- Law enforcement may obtain evidence through subpoena, consent, or search warrant.
Joey Coyle
- Unemployed longshoreman who found $1.2 million on the street in 1981 after it fell from an armored car and decided to keep it.
Fraud Triangle (Fraud Pyramid)
- Contains perceived pressure, perceived opportunity, and rationalization that can lead to fraud.
Restricted Countries
- Countries prohibited from U.S. dealings: Libya, Iraq, Iran, Syria, Sudan, Somalia, Yemen.
Structuring Money Laundering
- Involves three stages: placement, layering, and integration.
Red Flags in Transactions
- A notable red flag is the lack of identification during financial transactions.
Bank Secrecy Act
- Enacted in 1970, it requires financial institutions to file transaction reports to assist in investigations.
Transaction Structuring
- The act of breaking up money orders into smaller transactions to evade reporting thresholds.
Office of Foreign Assets Control (OFAC)
- Government office that enforces laws regarding economic and trade sanctions against targeted foreign countries.
Specially Designated Nationals
- A block list maintained by OFAC that includes individuals and entities banned from U.S. dealings.
Exempt Countries from Sanctions
- Notable non-sanctioned countries include Canada, Russia, and the UK, among others.
Paul Manafort
- Known for his high-profile lobbying activities and subsequent indictments.
Beneficial Owner
- The individual who ultimately owns or controls an account.
Politically Exposed Person (PEP)
- An individual who holds a prominent public position, impacting their risk for involvement in corruption.
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Description
Test your knowledge on anti-money laundering concepts with this quiz. Explore key definitions and elements related to fraud and money laundering. Perfect for those studying finance, law, or criminal justice.
